Auditors launch renewed attack on aid schemes

Date: 06/11/1997

By Mark Turner

THE EU's assistance programme for central and eastern Europe will come in for heavy criticism yet again in the Court of Auditors' annual report, due to be published later this month.

European Commission officials have been quick to leap to the Phare programme's defence, insisting the 1996 verdict does not reflect important changes made earlier this year.

But MEPs are bound to challenge this when the report is presented to the European Parliament on 18 November, given the concerns they expressed this week over the findings of the Court's 1995 report.

The attack, led by Danish Liberal MEP Eva Kjer Hansen, focused on the time Phare took to turn promises into payments (often two years), and the fact that over half of the programme's spending commitments had never seen the light of day.

This, Kjer Hansen argued, was a result of slow decision-making, overly vague contracts and too many 'Phare management units', many of which did not function properly. "I have to repeat the same criticisms year after year. I have the feeling that the Commission is not able to manage a project like Phare," she told European Voice.

Although the 1996 Court of Auditors' report recognises the problems confronting staff in the applicant countries, it once again attacks slow contracting and under-usage of funds.

It also identifies backlogs in funding by Tacis (the EU's programme for the former Soviet Union), and slow spending in ex-Yugoslavia.

In response, the Commission has pledged to move 150 million ecu from the 1997 Phare budget to 1999 - when the recipient countries will be more able to absorb the money - restrict cash advances, reduce time-limits for letting contracts and impose firmer conditions on funding.

Commission officials add that Tacis has already been made more relevant to recipients' needs, backlogs are being reduced and tighter deadlines have been imposed in the contracting and implementing procedure.

They also claim that political difficulties in Bosnia have made it almost impossible to work effectively there. "It is true that the pace of spending has been slow in 1997, but there are good reasons," said an official. "We suspended aid to the Republika Srpska because we need to be sure that the Dayton conditions are being respected. We also need to be sure that controls on spending are adequate."

Recent Commission findings that Bosnian government funds were being siphoned off illegally have not helped, and ethnic tensions often slow projects down.

But Kjer Hansen argues that more fundamental reforms are necessary, and says Commission delegations in central and eastern Europe should have more staff and more control over contracts, and the applicant countries themselves should be entrusted with greater control over the process.

European Court of Auditors criticise management of the PHARE Programme.